Page 103 - Stakis Consolidated Teaching Note

The Dogs, Aviemore and the Spanish hotel had to go,
Aviemore had been a large drain on the Stakis resources

for many years and the hotel in Spain, did not fit into the

future plans, as financial control would be almost
impossible. The management of the property division

was out sourced, at a much lower cost and tight financial

clauses to prevent any forced investment.

Problem Children, always need investment to turn them

into stars. There was no money available for the size of

the investment required and therefore they had to go. It

took a while, but eventually they were sold, but at a large
loss to the balance sheet.

The Star, hotels are the organisation’s core business and
best cash generator. They would therefore remain and

would indeed see over time, some investment.

The Cash Cows, they were all earning money for the
organisation, but the pressure from the bank was great,

therefore they had to go. At least, as profitable, going

concerns they should recoup some decent sums. Sir

Lewis realised that the casinos generated cash, some 20%
of stakes placed, but what could he do the banks

demanded the cash. It did however work out that he

managed to retain the casinos, as Sir Lewis managed to
convince the bank that debt was reducing sufficiently

through other sales.

Sir Lewis chose the strategic marketing direction of Stakis
by returning to the organisations core competences and